Hong Kong is one of those cities where owning a car is seen as more of a luxury than a necessity. This means that there are an abnormally high number of sports cars on the road when compared to cities of comparable sizes. If you are thinking of buying your first, or even your next sports car you are going to need to get it insured before you can drive it legally on the roads here. The thing is, due to the sheer power and price of these vehicles insurers will tend to have some restrictions and conditions on plans for these cars. Here, we take a look at three important things you need to know about insurance for sports cars in Hong Kong.
1. Insurers might limit who can drive the vehicle
Generally speaking, car insurance for private vehicles in Hong Kong will cover the vehicle thereby allowing other people who meet specific conditions to drive your car and still maintain coverage. We have discussed this in a previous article, which can be found here, but to summarize: As long as the driver has a valid driver's licence (as in a Hong Kong driver's license, or an international license recognized in Hong Kong) and is over a certain age (usually depending on the policy) then it should be ok to lend them the vehicle.
The thing is, sports cars are powerful and can be incredibly hard to drive if you have never driven one before, or are used to a slower car. This increases your chance of being in an accident and even doing some serious damage.
For this reason, insurers will usually limit who they will cover with these vehicles. They will usually only cover the main driver (person who takes out the policy) and maybe one secondary driver. This will vary by insurance company so it is important to review the terms and conditions on any plan you are considering.
If you lend your brand new Ferrari 458 to a friend who is not covered by your policy and they are in an accident, the insurer will deny all claims meaning you will be legally responsible for any damage.
But, it's not just friends or family you need to be aware of when it comes to letting people drive your car. You also need to consider the various parking services such as hotel and restaurant valets in the city. Usually, plans will cover employees of these services when they go to park your car, but with sports cars, this might not be the case.
Sure, these employees should be covered by the business's insurance policies but if they have been lax this will not be the case, which means that they were not covered leaving you responsible for paying for any damages caused due to an accident.
2. It is essential to maintain your sports car, your insurance could depend on it
Cars, like anything with moving parts, require regular maintenance in order to remain operating at peak efficiency. That is a major reason as to why your dealer or car manufacturer has a suggested maintenance schedule that they recommend sticking to. Yes, to some drivers this is a nuisance especially if you drive your car regularly and the maintenance can be costly.
But it is important to maintain your vehicle as it could impact whether an insurer will accept a claim for any damages caused by a breakdown. If an insurer can prove that you have not been maintaining your vehicle and a breakdown causes an accident they might deny any claims. They will argue that you willingly neglected the vehicle which put the vehicle at risk. This is based on a clause in most insurance contracts that requires you to ensure your vehicle is in proper working condition.
This is particularly important for sports cars as these high-performance vehicles usually require more routine maintenance due to their increased power and advanced parts. This means that there is a higher chance that something could go wrong. Take for example this article from the SCMP which highlights a number of incidents where cars from a popular manufacturer burst into flames while being driven.
If this happens to you, you go to submit a claim to your insurance company, and they find that you have not been maintaining your vehicle, they will deny your claim leaving you to pay for all repairs.
3. It would be in your best interest to consider comprehensive insurance
Finally, it would be a good idea to consider securing comprehensive insurance for your sports car. The reason why hinges on the cost to repair your vehicle should you be in an accident.
In Hong Kong, many drivers prefer to select third-party coverage for their car or corporate vehicle. The thing about these plans is that they only tend to have a limit of HKD 2,000,000 cover for property damage. Some commercial plans cover even less, often as low as HKD 1,000,000.
Now, for normal cars, this is usually an adequate amount but imagine if your brand new BMW i8 is involved in an accident that is not your fault. This means you will be able to submit a claim to the driver at fault's insurance provider and have them cover the damages right?
Yes, but the problem here is that if there is say a HKD 1,000,000 damage limit and your vehicle was written off (deemed too expensive to repair). A brand new BMW i8 costs around HKD 2,861,000 before the first registration fee (according to BMW Hong Kong) which means that the driver's plan will cover not even half of the vehicle's value.
If you had third-party only coverage in place, they will be forced to pay the balance, but it is a good chance that they won't be able to afford it. This likely means a long and protracted court battle and possibly the chance that you will need to pay for repairs if you want to be able to drive your vehicle again.
This gets even worse if multiple vehicles are involved as the damage limit listed above is per accident meaning it will be split among all parties damaged. This means that it is highly likely you will be paying a large sum out of pocket to repair a vehicle that was damaged by someone else and then having to settle the case in court.
Having comprehensive insurance for your car means you will be covered in the event of an accident. This also means that you will be able to get you car back faster.
To learn more about car insurance for your sports car, or to receive a quote please contact us today.